The impact of firm ownership, board monitoring on operating performance of Chinese mergers and acquisitions

Agyenim Boateng (), XiaoGang Bi () and Sanjukta Brahma ()
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Agyenim Boateng: Glasgow Caledonian University
XiaoGang Bi: University of Nottingham
Sanjukta Brahma: Glasgow Caledonian University

Review of Quantitative Finance and Accounting, 2017, vol. 49, issue 4, No 2, 925-948

Abstract: Abstract In this paper, we employ board monitoring mechanisms and within-firm governance variables to investigate the operating performance of 340 mergers and acquisitions in China over the 2004–2011 period. Our results document a significant deterioration in post-acquisition operating performance of acquiring firms over 12–36 months. We find independent directors, managerial shareholding, ownership concentration have a positive and significant impact on operating performance of acquiring firms. However, the related party transactions exert a negative and significant effect on matched control adjusted ROA. Further analysis of our sub-sample indicates that privately owned enterprises are better monitors compared to the state owned enterprises.

Keywords: Firm ownership; Monitoring; Mergers and acquisitions; Performance (search for similar items in EconPapers)
JEL-codes: G34 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (17)

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DOI: 10.1007/s11156-016-0612-y

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